San Diego Housing Market News and Analysis

How sustainable is all this? I implore you. Is all this normal and does it make sense? Is this how it's going to be from now on? Multiple bids on the way up AND on the way down? While unemployment rises? I'm very confused.

It's idiots that can not understand the value of things beyond "I can afford $X per month"

But unless they are paying cash, the house still has to appraise at that ridiculous price. They may get a better deal when the appraisal comes in much lower. Maybe they were using their heads after all?

I agree that the process is seriously flawed, and the realtor compensation system completely unfair, but that said, Sandra Rinomato (the host) is a pretty sharp cookie and isn't likely to pull numbers out of her butt. A lot goes on behind the scenes, and she bases her advice on data, like comps and buyer activity in the area. You'll see her tell buyers to lowball just as often as she tells them to overbid.

The listing agent for the property I just bought was incredibly unethical and unprofessional, bullying and harrassing our agent and our lender. He held all the cards in the deal, and we are convinced that he was lying about the other offers, but have no way of knowing for sure. Unfortunately, we were at his mercy. Sometimes life isn't fair.

Regarding real estate agents….. This has got to be the most outrageously over paid under needed job on the planet. Why so few know they can buy or sell a home WITHOUT an over paid middleman is appalling. The title company does the real work and the legal procedures that protect the process. If you need an extra level of confidence then hire a RE attorney.

I think of RE agents in the same vein as drug dealers. Sounds harsh I know but what other endeavor can get so much cash for so little work, with zero educational requirements (unless you count a 48 hour “course”). What other things can a housewife do to make $30k for a few hours of work? The enticement to lie and cheat is enormous. If a realtors lips are moving……..

CONFUSED, you said it well, it’s a flawed system.

Why would any sensible person intentional pay 6% to have a liar in the middle of their most expensive purchase? I love speaking directly with the buyer/seller, forego a realtor once and you never go back.

Never engage in bidding on houses in a declining RE market (duh). As with previous bubbles in CA, there will come a time in this bubble collapse when house sit and rot on the market, even well priced ones. That is a good sign the bottom is near.

I have bought land that was for sale ridiculously cheap yet had been on the market for 6 years and was littered with fallen, rusting signs of previous realtor efforts to move it. I remind myself of that when I'm tempted to call on a low price teaser in this market. Be patient and never, never listen to a realtor unless it a close friend not trying to score off you.

you can watch the episodes here:

http://www.hgtv.com/hgtv48/videos/index....

That Real Estate agent is just so full of it, not even funny!

Gotta weigh in on the old argument about using a realtor vs. going it alone.
Have bought & sold many properties, with and without real estate agents. In general, they are worthwhile simply because they insulate the buyer and seller from each other and smooth negotiations. Remember that the buying process is filled with pitfalls for each side and is a zero-sum game, with each side ready to rip the other to shreds. That's why, ideally, the seller and buyer should never meet. If you are buying, you want the seller's agent to knock some sense into them if they are delusional or in love with their house. If you are a seller, you want the agent tito market your property effectively to get the highest price and scope out the real buyers from the flakes. In countless other ways, good brokers move the transaction along, anticipate and solve problems, and coordinate all the necessary parties to do their job. These details are often ignored by the uninitiated who concentrate solely on the commission and ignor the time spent on deals that don't get consumated.
That said, agents and realtors vary widely in knowledge, effort, and ethics and it is your job to select one carefully.

Huh? What? How were you at his mercy? Could you please elaborate?

I don't see how an agent could hold you hostage like you suggest. I'm sure you had options.

But that's only for certain buyers and sellers. Personally, I've bought/sold with and without realtors, and it's been immeasurably easier to transact a deal without the agents in the middle. I like to tailor deals so that both the buyer and seller get what they want. Unfortunately, with agents, you never know what is motivating the other side, so are powerless to complete the transaction in the best way possible.

Agents are the ones who encourage the adversarial relationship between buyers and sellers. We must always remember that buyers and sellers both want the same thing (to exchange a particular piece of real estate for money).

Personally, I've found that agents can be more of a hindrance than help, but there are exceptions. Of course, any time you need to buy or sell from a distance, a GOOD agent is a must. This also applies when you have to sell, but work or other commitments prevent you from showing the house, etc.

IMHO, a buyer's agent is much less valuable than a listing agent, but ONLY if the listing agent makes himself available for regular showings. One of the more comical things about listing agents is when they think they should receive a 3% commission just for entering the property on the MLS (often with only one bad picture and no description). Some don't even like to answer questions when you call them because they think your agent should call instead. These people seriously need to go back to their fry cook jobs.

Sure, we had the option of walking away. The problem is that the house is one in a thousand. I've been watching the market like a hawk for 2 years and haven't seen one more perfect for our plans and price range (awesome location and condition). We didn't let on about this, but when you want a house badly enough, the realtor's lies do more damage. I'm sure they always claim there are other offers, but inventory has been so bad for the last year and a half that we didn't want to pass this one up, and so had to take his claims at face value. I'm guessing he squeezed an extra $5k out of us, but in retrospect it was worth it. It appraised at the sales amount, at least.

It's his other behavior (constant obnoxious phone calls to our agent and lender pushing for closing) that is going to get a letter written to his broker, the NAR and CAR. Not that it will do any good.

I'm with EconProf on whether to use a realtor or not. I found it very useful. We used a newbie, and while he made some mistakes, he worked very hard for us.

As for agents not working for their money, that's true in some cases, but for the most part, the successful ones work their asses off, 60 hours/week+. It's the pay structure that's messed up. I can understand some disparity between realtor salaries in different areas of the country, but it's currently really, really bad. Too dependent on price and not enough on workload.

And that's coming from a soon-to-be licensee (warm up the flames, Rt.66! At least I'm doing it the right way, via college, not a 48-hour course). Because I plan to be up front with my opinion of the state of the market, I'll be working in Temecula rather than the coast, so the honesty won't adversely affect my sales.

We used to really like this show...Sandra would help them get a low price.

But now, it seems like it is a mouthpiece for realtors...first bids over list (???) and the show makes it look like people tour 3 properties then buy (that would minimize the work of realtors, wouldn't it?).

Remember back when these shows would have a label on the screen showing the total number of houses toured? I haven't seen that in a few seasons...now it looks like everyone tours three and buys (shoot, we look at triple digits before we buy!).

Even Sandra's wardrobe isn't as appealing as it used to be...she used to dress very provocatively.

Maybe she should do a show about people like us who've bought a lot of homes. They can call it Property Sluts.

While they only show the buyers touring 3 properties, if the buyers take a long time and look at a lot of houses, they will mention it (although not say any more detail than that). You can also tell if seasons have past if it's an area with snow.

(And like you - I looked at a LOT of houses before buying my various houses. Not triple digits - but high double digits.)

The problem with analyzing real estate at the micro level is that the macro economic models do not work so well.

Macro generally assumes lots of vendors with large inventories of interchangeable, single-purpose goods competing for buyers in a transparent market where information sets (unknowns) are minimized.

Walmart is a brilliant example of this.

However, in real estate, there are a relatively small number of unique goods that are crazy expensive. There are piles of unknowns (from neighborhood violence to termites to closing costs)and the concept of value is much more ethereal.

Making a foolish move could make you into an FB and its easy to draw a line from A(bad decision) to B (bankruptcy).

Given this tension, I don't see the role of real estate agent going away any time soon.

I do agree with some of the things Rt66 said.

Some agent do jack shit and get way overpaid for it.
If it is not obvious that your agent is actually helping, or if it in doubt that they are actually working hard, then yeah, it might be time to revisit the arrangement.

However, given the OP's description, I would be willing to bet that the fair market value of the property is around 650-675.

To borrow from Warren Buffet, if you can find someone willing to sell you dollars for 80 cents each, then buy them.

Of course real property is not as simple as that but if something is a really good deal at asking (and there are other buyers) then negotiation really do look more like a bidding war.